October 11 Update

It has been an eventful summer of media coverage for the lawsuit and Save PERA COLA. Most important, the plaintiffs in the lawsuit against PERA and the State of Colorado achieved an early victory when Chief Judge Robert S. Hyatt refused the defendants’ motion to dismiss five of the eight claims.

The lawsuit: Gary R. Justus et al v. State of Colorado and PERA et al

The plaintiffs and defendants agreed that Claim II should be dismissed, and the defendants had not challenged Claim I or III. The judge also agreed with the plaintiffs and defendants that requests for monetary damages under Claims VI, VII and VIII (but not others) be dismissed. In other words, the plaintiffs won this first round completely and the lawsuit proceeds in excellent condition. The case number is 2010 CV 1589 and is filed in Denver County District Court, 2nd Judicial District. For a copy of this decision, go to the Court Filings and Resources tab above, then click on the top link. To see the basic document being argued click on 2010 March 18 Plaintiffs’ First Amended Complaint.

Media Coverage

New York Times August 6 (online) and 7 (print) “Battle Looms Over Huge Costs of Public Pensions.” In his information/opinion column, Ron Lieber provided a decent analysis of the pension issues on a national scale, adequately paraphrased Gary Justus’ comments about Colorado’s cuts of our annual benefit increases, then rudely lectures public retirees. “Consider what it means to be a citizen in a community. And what it means to be civil instead of litigious, coming to the table and making a compromise before politicians shove it down your throat and you feel compelled to challenge them to a courthouse brawl,” Lieber wrote. He missed the parts about our attempts to influence the legislation in legislative committees and the settlement offer we had proffered to PERA General Counsel Greg Smith before Governor Ritter signed the bill. (He refused it.) Article at http://www.nytimes.com/2010/08/07/your-money/07money.html?_r=1&scp=1&sq=%22battle%20loms%20over%22&st=cse

National Public Radio program “The Take Away” August 17 “Public Pensions: What Are a State’s Responsibilities?” This early morning nationally distributed news program provided a fair discussion of the lawsuit and what it means for retirees. Mr. Justus emphasized both the constitutionality questions of Senate Bill 1 and the financial effects on retirees. Stephen Fehr from www.Stateline.org recognized the good chance we have at success. Go to http://www.thetakeaway.org/2010/aug/17/public-pensions-what-are-states-responsibilities/ then click on LISTEN. Runs less than 8 minutes.

Stateline.Org , AUGUST 10, 2010“States test whether public pension benefits given can be taken away.” Stephen C. Fehr, who appeared on the The Take Away radio show with Mr. Justus, has written a well-researched article on the efforts by public pension officials and legislatures to reduce pension benefits across the nation, focusing on Colorado, Minnesota and South Dakota. He describes the differences in legal protections that exist in various states for retirees’ benefits. Fehr also shows why he believes that retirees have a good chance of winning in the courts. Links to several similar articles appear below his article. http://www.stateline.org/live/details/story?contentId=504503

The Colorado Statesman, August 20 “PERA gets clean audit, but questions remain on Denver Public Schools retiree pensions.”Marianne Goodland reports on the annual PERA audit before the Legislative Audit Committee. Of note are paragraphs 8, 9, and 10 which refer to the lawsuit as one of the “ “lynchpins” that all affect PERA’s ability to reach full funded status.” It also cites PERA General Counsel Greg Smith as saying PERA would have to pay the $500,000 insurance deductible for legal fees and insurance should cover anything above that. SPC’s comment: “Our pension contributions at work…” http://coloradostatesman.com/content/992068-pera-gets-clean-audit-questions-remain-denver-public-schools-retiree-pensions .

CBS Evening News August 9 Katie Couric’s Notebook on Pensions. Ms. Couric references Colorado’s pension reform bill and Ron Lieber’s NY Times article in this shallow piece. She suggests “something needs to change to protect the futures of the next generation of teachers and firefighters, as well.” “Most of us have only a 401k, if that…” she adds, without mentioning how large hers is! The NY Times ‘ripple effect’ is in motion here, creating small waves with scant effort or research. http://www.cbsnews.com/8301-500803_162-20013120-500803.html

INDenverTimes, May 13 “PERA responds to retiree lawsuit.” Todd Engdahl gives a fair review of PERA’s motion to dismiss six of the eight claims. (The judge recently denied the motion to dismiss the claims, except where plaintiffs were in agreement.) A copy of PERA’s motion to dismiss is appended. http://www.indenvertimes.com/pera-responds-to-retiree-lawsuit/

Colorado Springs Gazette, October 6 “Tancredo, buoyed by recent polls, says he’s in to win.” In a political news article, gubernatorial candidate Tom “Tancredo pledges to save $400 million a year by forcing changes to PERA, the state education retirement program that he says “sucks money out of the general fund.” He backs a seven-year freeze on cost-of-living increases and changes in benefits in order to reach the savings.” While this should be of interest to all PERA members and retirees, SPC does not endorse or advocate for or against any political candidates. Read more: http://www.gazette.com/articles/tancredo-105920-long-colorado.html#ixzz12AT5nt55

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People that have not retired yet and have purchased service credit should know that efforts are currently underway to pursue the rights as outlined in Colorado statute. Interested parties should email jmmerpmstg@gmail.com and a mailing list is being created.

What was our settlement offer submitted prior to the SB1 signing?\\As noted in the above “He missed the parts about our attempts to influence the legislation in legislative committees and the settlement offer we had proffered to PERA General Counsel Greg Smith before Governor Ritter signed the bill. (He refused it.)”

We offered to not challenge in court the elimination of the 2010 annual benefit increase (ABI) if PERA and the State of Colorado would request and receive a legal ruling on future ABIs from the Colorado Supreme Court prior to signing Senate Bill 1. PERA General Counsel Greg Smith declined the offer, as there was no way to guarantee someone else would not sue.

Tancredo says that paying the bills for contractual services sucks money from the general fund? That’s brilliant !………Does it suck money from his personal funds when he buys something? Does it suck money from his household general fund if he, say, contracts for housepainting or lawn care ? OF COURSE the payment for PERA employee contracts costs money, that’s what “employee” means !! If they need to change the benefit package for future retirees, let them make those changes, (though I suspect it will diminish their ability to compete in the market for prospective “highly qualified” teachers). Nevertheless, making changes to contracts ALREADY FULFILLED cannot be allowed to stand. To do so violates every principle of contract law and forever casts a shadow on the very concept of
the term “fully vested”. Please don’t anyone forget: 1) It’s OUR money they mismanaged
and 2) This is not / never was a “cost of living” increase.
Finally a point that so far remains unaddressed: What happened to the huge influx of funds from their hard-sell drive to sell us “service credit” during the mid 90’s ??

We appreciate your persistance in this matter. Our retirement planning included the annual increase of 3.5% and while I understand the need for PERA to remain fiscally sound I really believe that this can be accomplished by making appropriate changes to Future Retirement benefits without impacting those who took advantage of the “Contract” we entered into when we became public employees and, in many cases, accepted lower salaries as a part of our “Total Salary and Benefit Package.

The link to the October 4 P&I article doesn’t work on my computer (it takes me to the subscriber page for P&I.) However, you can read the October 4 article by punching “COLA reduction laws under fire in 3 states” into Google.